On November 5, 2020 Regulus Therapeutics Inc. (Nasdaq: RGLS), a biopharmaceutical company focused on the discovery and development of innovative medicines targeting microRNAs (the "Company" or "Regulus"), reported financial results for the third quarter ended September 30, 2020 and provided a corporate update (Press release, Regulus, NOV 5, 2020, View Source [SID1234570064]).
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"We are pleased with the progress on our ADPKD program with the recent announcement of dosing of the first patient in the Phase 1b clinical trial of RGLS4326 in patients with ADPKD", stated Jay Hagan, CEO of Regulus. "Next year is shaping up to be an important one for Regulus, with data from the first cohort anticipated by end of Q1 2021. We also achieved $10 million in milestones from our collaboration with Sanofi enabling us to reduce our outstanding debt to $4.7 million and extend the interest-only period through the end of 2021."
Third Quarter 2020 Corporate Highlights and Recent Updates
Amendment of Sanofi Collaboration Agreement and Achievement of Milestones: In August 2020, the Company entered into an amendment with Sanofi concerning the receipt of potential milestones from Sanofi for its development of miR-21 programs. Under the terms of the amendment with Sanofi, the Company was eligible to receive $4 million upon the completion of transfer and verification of certain materials valued at an additional $1 million sold to Sanofi. In addition to this payment of $5 million received, the Company achieved a $5 million interim enrollment milestone and is eligible to receive an additional $25 million upon the successful achievement of a development milestone related to the Phase 2 HERA study.
Term Loan Amendments and Reduction in Principal: In August 2020, and concurrently with the Sanofi amendment, the Company amended its term loan agreement with Oxford LLC, under which the Company is eligible for up to an additional seven months of interest only payments in the event the Company pays down $10 million in loan principal before April 30, 2021. In September and October 2020, the Company made payments totaling $5 million to Oxford and plans to make an additional $5 million payment to Oxford before the end of 2020, thus triggering the additional interest only period. These payments will reduce the remaining principal due under the term loan to approximately $4.7 million. Remaining principal and accrued interest payments will commence on January 1, 2022.
Program Updates
RGLS4326 for ADPKD: In October 2020, the Company dosed the first patient in a Phase 1b clinical study for RGLS4326 in patients with ADPKD. The Phase 1b is an adaptive design, open-label, multiple dose study in up to three cohorts of patients with ADPKD and will evaluate administration of RGLS4326 for safety, pharmacokinetics, and changes in levels of polycystin 1 (PC1) and polycystin 2 (PC2). Patients with ADPKD, due to a mutation in the PKD genes, have been reported to have low levels of PC1 and PC2, the proteins encoded by the PKD1 and PKD2 genes, respectively. This study is designed to assess whether different dose levels of RGLS4326 can increase levels of PC1 and PC2 in ADPKD patients. The first cohort is planned to enroll up to nine patients who will receive RGLS4326 every two weeks over a six week period. The Company anticipates availability of results from the first cohort by the end of Q1 2021.
Advancement of Hepatitis B virus (HBV) Program: The Company has identified several microRNA targets that serve as host factors for the hepatitis B virus (HBV). Our lead compound directed to one of the host microRNAs has demonstrated nanomolar potency against HBV DNA replication and more than 95% reduction in Hepatitis B surface antigen in in vitro studies. Additionally, we have demonstrated reduction of HBV DNA, surface antigen and pgRNA in an in vivo efficacy model. The Company believes that targeting a host factor in the liver represents a unique mechanism of action for treatment of the virus compared to other programs in development and holds the potential for achieving a functional cure. The Company has nominated a development candidate and plans to commence IND-enabling activities.
Additional Research Updates: Cell therapies have been approved to treat a variety of hematological malignancies. Targeting solid tumors, however, has proven challenging for cell therapies due to the immune-suppressive effect of the tumor microenvironment (TME). The Company believes that ex vivo modulation of microRNA may enable cell therapy approaches to overcome the effects of the TME and address other challenges faced by cell therapies. The Company has demonstrated that targeting microRNA ex vivo can improve certain characteristics of engineered cells including improved in vitro expansion, effector function, cytokine production, as well as resistance to exhaustion induced by tonic signaling. The Company is pursuing multiple applications of microRNA technology in a variety of cell therapies.
Third Quarter 2020 Financial Results
Cash Position: As of September 30, 2020, Regulus had $17.8 million in cash and cash equivalents.
Revenue: Revenue was $5.0 million for the three and nine months ended September 30, 2020, respectively, compared to less than $0.1 million and $6.8 million for the three and nine months ended September 30, 2019, respectively. Revenue recognized for the three and nine months ended September 30, 2020 was attributable to the completion of transfer and verification of certain materials to Sanofi under the August 2020 amendment. Revenue recognized for the nine months ended September 30, 2019 was attributable to the upfront payments received under the 2018 Sanofi Amendment related to the transfer of the RG-012 program to Sanofi.
Research and Development (R&D) Expenses: Research and development expenses were $4.0 million and $11.4 million for the three and nine months ended September 30, 2020, respectively, compared to $2.4 million and $10.3 million for the three and nine months ended September 30, 2019, respectively. The aggregate increase for the three months ended September 30, 2020, as compared to the three months ended September 30, 2019, was driven by an increase in external development expenses, primarily attributable to FDA lifting the partial hold on the MAD study in December 2019 and completion of the dosing for the Phase 1 of the MAD study in July 2020, as well as start-up activities leading up to the first patient dosing in our RGLS4326 Phase 1b study in October 2020. The aggregate increase for the nine months ended September 30, 2020, as compared to the nine months ended September 30, 2019, was driven by an increase in external development expenses, attributable to RGLS4326 MAD and Phase 1b study activities, partially offset by a reduction in personnel and internal expenses.
General and Administrative (G&A) Expenses: General and administrative expenses were $2.1 million and $6.7 million for the three and nine months ended September 30, 2020, compared to $2.6 million and $9.0 million for the three and nine months ended September 30, 2019. These amounts reflect personnel-related and ongoing general business operating costs. The decreases for the three and nine months ended September 30, 2020, as compared to the three and nine months ended September 30, 2019, are primarily attributable to continued cost reduction efforts subsequent to our corporate restructurings.
Net Loss: Net loss was $1.5 million, or $0.04 per share (basic and diluted), and $14.4 million, or $0.47 per share (basic and diluted), for the three and nine months ended September 30, 2020, respectively, compared to $5.4 million, or $0.26 per share (basic and diluted), and $13.7 million, or $0.86 per share (basic and diluted), for the same periods in 2019.
About ADPKD
ADPKD, caused by the mutations in the PKD1 or PKD2 genes, is among the most common human monogenic disorders and a leading cause of end-stage renal disease. The disease is characterized by the development of multiple fluid filled cysts primarily in the kidneys, and to a lesser extent in the liver and other organs. Excessive kidney cyst cell proliferation, a central pathological feature, ultimately leads to end-stage renal disease in approximately 50% of ADPKD patients by age 60.
About RGLS4326
RGLS4326 is a novel oligonucleotide designed to inhibit miR-17 and designed to preferentially target the kidney. Preclinical studies with RGLS4326 have demonstrated direct regulation of Pkd1 and Pkd2, reduction of cyst growth in human in vitro ADPKD models, and attenuation of cyst proliferation and improvement of kidney function in mouse models of ADPKD. The RGLS4326 IND is currently on a Partial Clinical Hold for treatment of extended duration by FDA until the second set of requirements outlined by the agency have been satisfactorily addressed. Information from the Phase 1 clinical studies, together with information from the recently completed additional nonclinical studies, will be used to address the second set of requirements to support studies of extended duration. RGLS4326 received orphan drug designation from FDA in July 2020.